The Head and Shoulders pattern is a classical pattern of technical analysis. Let s have a look at its main elements as well as the characteristics of trading with the use of it.
The Flag and Pennant patterns appear rather frequently on price charts. They are trend continuation patterns, working in the presence of a strong trend, same as trend reversal patterns. When such patterns appear, we may forecast that the trend will continue.
The Triangle pattern appears on different charts rather frequently. Normally, the Wedge is considered a reversal pattern, forming on maximums and minimums of a price chart in an up- or downtrend. A Wedge is quite similar to a Triangle, forming between the two converging support and resistance lines.
A chart pattern means a repeated element in different spheres of life – nature, psychology, music, design, trading, etc. When it comes to trading, a pattern is a stable and repeated combination of data on prices, volumes, or indicators.